Microsoft Simplifies System Center 2012 License Fees

In Microsoft's battle with VMware for cloud management, price is a weapon. System Center 2012 users will have two options: a low-cost starter edition, or a datacenter edition for more virtualized shops.

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With its System Center 2012 update, Microsoft will no longer offer a long list of mix-and-match combinations of separate applications as its System Center product. The practice has lead to 113 different price points for System Center over the last 10 years, said Garth Fort, general manager of System Center and virtualization marketing.

Microsoft is rolling all eight applications or "components" together into two packages: Standard edition and Datacenter edition. The same code comes in each package, but Standard edition is limited to two operating system environments per license. That would allow a two-socket x86 server to be covered by one Standard license (regardless of the number of cores running on each CPU).

Some confusion ensued as Microsoft attempted to explain its new pricing model to the press and reviewers at a daylong briefing Jan.12 at Microsoft headquarters. Fort said the two-socket server is a popular choice in the System Center customer base and Microsoft is attempting to ensure that customers come out more or less even in the pricing change. Standard edition will be priced at $1,300.

Asked what would be the change for the average customer, Fort answered," for some it gets cheaper, for some it goes up. Your mileage will vary. We're not able instantly to say, 'Here's your new bill.' We've been training the sales and field support force to help customers through this."

Basically, Microsoft is keeping a CPU-based pricing model, rather than charging per virtual machine, virtual memory, or other virtual asset. By putting all System Center components into the Standard edition, it appears to be offering a low-end option at a highly attractive price. Most customers will find they are getting their money's worth if they qualify as "small and lightly virtualized," the type of customers most likely to adopt Standard licensing, Ford said.

But under Microsoft's existing definition of operating system environment (OSE), a virtual machine is another OSE because it uses an instance of the operating system. As virtualization levels reach five or more VMs per server, customers are likely to move up to Datacenter edition, where customers may run any number of VMs on a licensed server, Garth explained.

Running fewer than five or six VMs per host server is much less common than a few years ago. The ratio of VMs to physical servers is frequently in the high 20s or 30s range at practiced, heavily virtualized shops. Pricing on Datacenter edition for such customers is to be made available at a later date. There was no reference to Datacenter edition pricing in Microsoft's Jan .17 press release announcing System Center 2012.

But Microsoft is interested in establishing System Center in as many data centers as possible to manage its buildout of virtualized servers and private clouds. To fail to do so at this time might leave too large a gap for VMware, which is pushing its own data center management capabilities from its virtualization software platform, vSphere 5.

T. Rowe Price, Lufthansa Systems, and Unilever were all named as early users of System Center 2012 in the announcement.

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